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March 09, 2015

FBI and IRS Investigate Spending by Shuttered Minn. Nonprofit

A Minneapolis social-service charity that folded in September after being raided by state authorities is now under investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Minnesota Public Radio and the Star Tribune report. The federal inquiries were disclosed Thursday in a legal filing by a court-appointed receiver hired for Community Action of Minneapolis after a state audit found more than $800,000 in questionable spending by the organization.

Minnesota officials are seeking repayments from the charity, which provided heating aid and weatherization services for low-income people. According to the audit by the state Department of Human Services, senior managers at Community Action used organizational funds for bonuses, luxury travel, and personal expenses. Most of the charity's funding came from the state Department of Commerce, which has also initiated an investigation, receiver Michael Knight wrote in Thursday's filing.